EMMA ALBERICI, PRESENTER: And we'll cross now to the ABC's Middle East correspondent Matt Brown in Erbil, the capital of Iraqi Kurdistan, an autonomous region in northern Iraq.

Matt, Iran has sent two battalions into Iraq, tell us where are those troops and what sort of involvement are they likely to have in this conflict?

MATT BROWN, MIDDLE EAST REPORTER: Well if those reports are correct around Tikrit, that's around Saddam Hussein's old home town, it's also an important gateway from the north down towards Baghdad,

But you've also got important Shi'ite shrines in that area and I think significantly the call to arms, if you like, to jihad from the most supreme religious authorities in Iran has been echoed by the most supreme religious authorities here in Iraq.

The ayatollah Ali al-Sistani he's said to the civilians of Iraq to go and join the armed forces. That doesn't just mean join the armed forces to the common man's ear but also legitimates participating in Shi'ite militias of which there are several, very powerful, well funded, well trained and people with experience going back to when they were trained and housed in Iran under the days of Saddam Hussein.

EMMA ALBERICI: And in one of the most unlikely alliances Iran will be fighting potentially alongside US interests. Is there any indication as to whether some kind of cooperation might be in the offing between Iran and the US?

MATT BROWN: Iran has said that it's so concerned about what's happening here that it's prepared to cooperate with the US but let's make no bones about this. Iran sees long-term strategic interests here, geo strategic interests, religious interests, the kind that Sean was just reporting on, Arab and Persian/Iranian peoples of the same Shi'ite faith sharing a common agenda against the Sunnis.

And I think the real danger is that what your speaker in that previous story's mentioned, the arc of conflict between the Persian Gulf across now to the Mediterranean, we've crossed that line. That's the reality today. When Syria was intact during the American invasion of Iraq, it wasn't the case but now you do have a full-blown sectarian conflict from coast to coast.

EMMA ALBERICI: Now you're there in Kurdistan which is very much its own part of Iraq. Describe the mood there for us?

MATT BROWN: It's reasonably benign. I mean I was up at the border, if you like, between Kurdistan and Mosul today. There was still some people coming through, much less than we've seen previously. Some people are going back because they've been reassured that ISIS isn't going to introduce a reign of terror.

ISIS has announced sharia rules for the areas it controls - no smoking, no drugs, women to be clothed in non-revealing outfits but they haven't yet engaged in a broad scale in the kind of brutality against civilians that so alienated ordinary Sunnis in 2004, 5 and 6.

EMMA ALBERICI: The UN estimates at least 500,000 people have fled their homes over the past couple of days, many of them have made their way to Erbil where you are now. How is that area coping with this sudden influx of people?

MATT BROWN: Look, there will be an influx and people going back, I think. I mean there will be a lot of pressure on this area. There are already people here, I should say, from Anbar province where the Sunni insurgency and the Shi'ite Government crackdown has been raging for a good six months now. And so you've seen all through Iraq displaced people. In fact half a million from that Anbar conflict already have been moved throughout Iraq.

So you're looking at between 500,000 and up to a million people being displaced by this and all the time we're talking about militias mobilising, government forces mobilising and all of the dynamics are making it seem like this is spiralling way out of control.

EMMA ALBERICI: Matt Brown there in Erbil, Kurdistan, thank you very much.